Are you thinking about going to a property auction soon? Are you interested in buying a property but you haven’t found the right one yet? There’s no reason to worry about getting your finances sorted yet, right…?
There have been a number of occasions recently where I’ve met with clients who have either already committed themselves to buying a property or have found the one they want to make an offer on, but haven’t yet sorted out where the funds are going to come from to make the purchase.
Submitting a loan application under time pressure to “win” a property or “beat” other potential buyers can add a lot of pressure to what is already a stressful situation.
If you are seriously considering a property purchase, it’s worth spending the time sooner rather than later figuring out what lenders work for your unique circumstances and putting in an application for conditional approval. This approval is conditional on an acceptable property valuation once you’ve found the property you want, which means you don’t need to know exactly what property you intend to buy at this stage.
Conditional approvals generally last for 3-6 months and sometimes longer. Additionally, if you haven’t found the right place by the time the conditional approval lapses, it’s usually a fairly straightforward process to request an extension without having to complete a whole new application.
While you might expect fewer applications being submitted due to increasingly strict government regulations and various lenders’ recent policy changes restricting their own intake of investment loans, many lenders currently have application processing times of a week or longer. With standard cooling off periods of 5 days, no cooling off periods for auctions, and many sellers insisting on buyers waiving their cooling off rights before they accept an offer, not knowing that a lender will provide you funds for your property purchase can be very stressful.
Unlike processing times for full applications, the turnaround time for property valuations is generally much shorter. This means that buyers with conditional approval can often be in a position to make an unconditional offer in a shorter time frame than those having to start the application process from scratch.
If you’re considering purchasing a property (or if you’ve already made an offer and still don’t have your finances sorted), I encourage you to get in touch. With access to over 20 lenders on our panel and an awareness of the strengths, weaknesses and current processing times for each, we can help you at whatever stage in the property purchase cycle you’re at.
Noah Cohen is a Mortgage Broker with Want A Loan, Credit Representative (CRN 490277) of BLSSA Pty Ltd (Australian Credit Licence 391237)
